As businesses continue to recover from the pandemic, reaching a wider audience is more important than ever. By 2024, it is estimated that there will be more than 7 billion smartphone users worldwide, and as such a large and steadily growing audience, targeting them should be a key consideration of any business’ marketing strategy. This is where location-based approaches like geotargeting come in.
What is geotargeting?
Geotargeting is a type of advertising that uses location data to target audiences with messages specific to their locations or geographic areas. This can be for countries, areas of a country, a city or town or even something as specific as a radius around a particular business or place of interest. Geotargeting is widely used in digital advertising, as it allows businesses to tailor their message to a specific target market, resulting in more relevant messaging and better return on investment (ROI). All the major ad platforms (Meta, Google etc) offer geotargeting.
How does geotargeting work?
Geotargeting works through geolocation. Geolocation simply refers to the geographical location of a device – such as a smartphone, laptop, fitness tracker or smart speaker – that is connected to the internet.
Geolocation platforms actively collect geolocation data through a device’s connection to GPS and cellular networks. Enabling location services on your smartphone or other connected device means the geolocation platform can estimate your location in relation to those networks. The more networks that are in the area, the more accurate the location will be, so it’s easier to pinpoint in well-connected urban areas than rural ones.
Geolocation data is also collected passively via IP addresses. Internet service providers will know their customers’ IP address and general location, which they will link to physical locations in their databases. This data is not as specific as GPS location data, but still gives a good indication for advertisers serving ads based on the nearest town, city or country.
In addition to GPS tracking and IP address tracking, advertisers can use social media profiles for geolocation. Many social media platforms, such as Facebook and Instagram, allow users to specify their location in their profile. Advertisers can use this to target ads to users who reside in, work in or frequent a particular area. Cross-referencing these different types of geolocation data can result in more accurate pinpointing of location information.
Once the platform has this location data, it uses it to place relevant ads in front of users. As an example, imagine you run a restaurant specialising in haggis in the Scottish Highlands. Whilst you may feel that advertising to the whole of the UK is beneficial as it might drive customers to visit, in truth, the majority of people that see your ads will have no realistic prospect of attending the restaurant. With geotargeting, your ads platform will serve your ads to people living in, working in or visiting the local area who are more likely to be interested in eating at (and actually attending) your restaurant.
Why use geotargeting?
Thanks to evolving technology, geotargeting is precise, making it a cost effective and practical advertising method. Geotargeting is useful for any business, but if you have a brick-and-mortar store or sell a product that is often purchased ‘on the go’, such as sandwiches or coffees, this is a particularly useful advertising strategy. You can show ads for your business to users within close proximity, perhaps offering a discount, limited time offer or special menu, encouraging them to visit. Maybe you work for a local theatre that wants to sell more tickets for a family show; try geotargeting focused on the local area, combined with a custom audience of parents. Perhaps you manage a tourist destination; use geolocation to target ads to users who are visiting the area or to target the area around local hotels. There are so many scenarios where geotargeting can be beneficial.
You can also exclude the places you don’t want to serve your ads. An example of when this might be relevant is if you are a retailer that can only deliver within Europe; it would make sense to exclude the rest of the world in this case, preventing you from wasting money and also from disappointing potential customers when you are unable to deliver to them. You can also use this exclusion principle to prevent competing companies from seeing your ads by excluding the area around their stores (although this might also mean you miss out on some potential customers).
Another benefit to geotargeting is that it allows you to tailor the content of your ads to suit the geographic location; for example, an advertiser targeting ads to a range of different countries might alter the content in each to reflect the local language or cultural beliefs, or account for differences such as the local climate. Imagine you were a clothing retailer; you wouldn’t want to waste your ad budget targeting people in warmer climates with winter clothing and vice versa. Tailoring your ads through geotargeting ensures the ads are relevant to each target audience, which leads to increased engagement. Bear in mind, however, that this can come with increased costs due to having to create multiple ads to suit different locations.
Despite these potential increased advertising costs, geotargeting – although often underrated – is a powerful tool for business. It is a great way to ensure ads are only shown to those who convert, thereby increasing the effectiveness and efficiency of marketing campaigns. Additionally, geotargeting offers businesses a valuable opportunity to reach their target audience in a more personalised way. In research conducted by Lawless Research, almost 9 in 10 marketers said location-based advertising and marketing resulted in higher sales, followed by growth in their customer base (86%) and higher customer engagement (84%). With statistics like these, it’s no wonder that 95% of global companies already use location-based data in their marketing strategy. Will your company be next?
Give it a try – and let us know how it goes.